Propel Morning Briefing Mast HeadAccess Banner  
Propel Morning Briefing Mast Head Propel's LinkedIn LinkPaul's Twitter Link Paul's X Link

McCain Banner
Morning Briefing for pub, restaurant and food wervice operators

Tue 31st Jan 2017 - Update: Apprenticeship Levy warning, AB InBev advisory fees, Britvic trading
Apprenticeship Levy ‘could sacrifice quality for quantity’, new report warns: The Apprenticeship Levy risks repeating the mistakes of the past, being poor value for money and causing particular damage to the public sector, a think tank has warned. The levy, set to start in April, is a 0.5% tax on all employers with a wage bill of £3m or more, which sector trade bodies have previously warned will place a “severe burden” on employers in the hospitality industry. It is expected to raise £2.8bn by 2020 to pay for apprenticeships. The policy transfers the costs of apprenticeships from the public to private sector, tackling the problem that many big companies do not invest in training. However, a report by the Institute for Fiscal Studies (IFS) has found “only a fraction” of the cash raised by the levy will be spent on apprentices, with government spending expected to increase by only £640m between now and 2020, reports The Times. The report criticised the government’s target of 600,000 new apprentices a year in this parliament, a 20% rise on 2015. It said: “This large expansion risks increasing quantity at the expense of quality.” It also claimed the government has “failed to make a convincing case for such a large and rapid expansion in apprenticeships”, amid “wildly optimistic claims about the extra economic activity or earnings such investment in apprenticeships could generate”. New training subsidies also mean bosses will have to pay nothing, or at most 10% of off-the-job training for apprentices, up to certain price caps set by the government. The report argued this would increase the incentive for employers to hire apprentices, particularly those aged 19 and over for whom employers paid at least 50% of training costs before 2017. The IFS said such “free” training means employers have little incentive to choose providers that could provide training at a lower price and will have a big incentive to relabel existing training schemes as apprenticeships. The government has said public sector employers with at least 250 employees in England must take on apprentices amounting to 2.3% of their headcount each year. The IFS report said this policy takes no account of the big differences between organisations and implied about one in five new hires made in the public sector must be an apprentice. Neil Amin Smith, an author of the report, said: “We desperately need an effective system for supporting training of young people in the UK. But the new apprenticeship levy, and associated targets, risk repeating the mistakes of recent decades.”
AB InBev emerges as biggest source of advisory fees in Europe after paying $491m during £79bn SABMiller takeover: Anheuser-Busch InBev (AB InBev) has emerged as the biggest source of advisory fees in Europe after it paid $491m during its £79bn takeover of SABMiller. Data from Dealogic for Financial News showed European companies paid banks about $16.1bn for advice on mergers and acquisitions, debt and equity capital markets and loans during the year, down from $18bn in 2015 and the lowest total since 2012. The fees paid by AB InBev related to mergers and acquisitions as well as debt-raising advice. That included two bond issues and advice on disposals to get the deal through competition authorities worldwide. The biggest slice of the fees went to Lazard, which collected $98m, while Deutsche Bank made $69m and Barclays $54m. Lazard is a long-time AB InBev adviser, working on Interbrew’s merger with AmBev, of Brazil, to form InBev in 2004 and its acquisition of Anheuser-Busch in 2008. Lazard’s UK chief executive William Rucker told Financial News the SABMiller transaction had been “exhausting but enormous fun” and its like should be on any investment banker’s “bucket list of deals”. A distant second was Agnaten Holding, a privately held Austrian investment management firm that is the biggest shareholder in JAB, an investor in consumer goods companies including Krispy Kreme. Agnaten paid $184m in fees. It closed deals including the $14.2bn acquisition of Keurig Green Mountain, an American coffee company. Morgan Stanley, JP Morgan and Goldman Sachs were the biggest winners from Agnaten’s activities. Drugs group Shire Pharmaceuticals was the third-ranked company after it paid out $167m last year following two takeover deals.
Britvic reports 4.3% quarter one sales rise: Britvic has reported first quarter revenue of £351.0m, an increase of 4.3% on last year year. The company said the strong start to the year was underpinned by volume growth of 3.9%. Chief executive Simon Litherland said: “The new financial year has started well with group revenue 4.3% ahead of last year, continuing the good progress we made as a business in the prior year. Encouragingly, all our key markets have delivered revenue growth. While the external environment remains uncertain, we are confident that the strong execution of our marketing and innovation plans combined with disciplined revenue management and our cost saving initiatives will deliver full year results in line with market expectations.” The company added: “GB reported a 2.2% increase in revenue on the previous year. Whilst the grocery channel remained subdued, we delivered growth from our focus on the convenience and foodservice channels, including Subway. GB carbonates continued its outperformance of the market with a revenue increase of 5.5%. Pepsi Max and 7UP were both in strong growth, as was R Whites, benefiting from its relaunch last year. Average retail price declined primarily as a result of channel and pack mix. GB Stills revenue declined by 3.8%. While both Robinsons and Fruit Shoot continued to decline, reflecting the challenging categories in which they operate, both brands showed signs of an improving trend. J20 grew with a strong Christmas performance led by the Spritz and Glitter Berry variants. France revenue increased 6.3% with the branded portfolio in strong growth, led by Fruit Shoot and Pressade, whilst lower margin private label revenue continued to decline. Ireland revenue increased 6.4%, with both Counterpoint and our branded business performing well. Ballygowan water was in very strong growth, which has an adverse impact on the average Ireland average retail price. The international division reported a 19.8% increase in revenue, compared with a 13.8% decline in the first quarter last year and was largely as a result of a 14.1% increase in volume. The majority of the growth came from Fruit Shoot in the USA and revenue also increased in the export markets including Benelux. Brazil generated a 7.9% increase in revenue, with average retail price increasing 17.1% as we continued to mitigate inflationary input costs. Volume declined reflecting the volatile macro environment. We continue to make good progress with the implementation of our three-year business capability programme. The new PET line in Leeds is fully operational, three new can lines in Rugby are being commissioned and our continued focus on cost control will deliver an additional £5m benefit this year. The acquisition of Bela Ischia remains on-track to complete by the end of March and as well as delivering significant cost synergies it will further strengthen our platform in Brazil.”

Return to Archive Click Here to Return to the Archive Listing
Punch Taverns Link
Return to Archive Click Here to Return to the Archive Listing
Propel Premium
Pernod Mailibu Banner
Arla Banner
Meaningful Vision Banner
Mccain Banner
Casula Dining Banner
Heineken SmartDispense Banner
Contract Furniture Group Banner
Pepper Banner
Heinz Banner
Alcumus Banner
Santa Maria Banner
Cruzcampo Banner
Propel Banner
Nutritics Banner
Heinz Banner
Zonal Banner
Access Banner
Propel Banner
Christie & Co Banner
Sideways Banner
Kurve Banner
CACI Banner
Airship – Toggle Banner
Wireless Social Banner
Payments Managed Banner
Deliverect Banner
Zonal Banner
HGEM Banner
Pepper Banner